Railroad Commission Cases: State Regulation Affirmed with Corporate Property Rights Caveat

The Supreme Court ruled in the Railroad Commission Cases that states possess constitutional authority to set railroad transportation rates through regulatory commissions, upholding Mississippi’s 1884 statute establishing rate-setting power. Filed the same year as the Santa Clara headnote, this case affirmed state police power over corporate railroad operations. However, the Court embedded a critical limitation that would later undermine regulatory authority: “This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretense of regulating fares and freights, the state cannot require a railroad corporation to carry persons or property without reward.” This “regulatory takings” doctrine created a constitutional basis for corporations to challenge rate regulation as property deprivation without due process—the same Fourteenth Amendment framework being simultaneously established for corporate personhood. The decision’s dual legacy allowed states to regulate while empowering corporations to invoke constitutional property rights against “confiscatory” regulation. This tension between Munn v. Illinois’s affirmation of broad regulatory power (1877) and the Railroad Commission Cases’ property rights limitations (1886) reflected the Court’s shifting alignment toward corporate interests during the Gilded Age, when railroad corporations were the most powerful economic and political forces in America.